What is Universal Credit and how does the Autumn Statement affect it?

Philip Hammond has scaled back planned cuts to Universal Credit, with an estimated three million families keeping an additional 2p for every extra pound they earn.

With changes to the "taper rate" for Universal Credit, the Chancellor hopes to soften the impact of welfare cuts introduced by his predecessor George Osborne.

Mr Hammond got an eve-of-statement boost as official figures showed the Government had borrowed a less-than-expected £4.8 billion last month.

But he has little room for manoeuvre in his efforts to help those families who are "just about managing" - known in Whitehall as the "Jams" - who Prime Minister Theresa May has identified as her main priority for support.

Just-managing families have already taken a big hit from previously announced cuts and there are more in the pipelineAlison Garnham, Child Poverty Action Group

The Treasury said Mr Hammond's package was designed to "improve the living standards of ordinary working class people and their families", in line with the ambitions set out by Mrs May in her keynote speech to the Conservative conference last month.

Watch | Universal Credit explained by the DWP

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But the Universal Credit reform is unlikely to appease critics who have been calling on the Government to reverse changes introduced by Mr Osborne, which will drastically reduce the amount workers can earn before losing benefits.

Mr Osborne cut the "work allowance" threshold at which Universal Credit begins to be withdrawn from £222 per month for a couple with children and £263 for a single parent to £192, as part of a package designed to save £3 billion in welfare payments.

Campaigners from the Child Poverty Action Group warned that cuts planned for 2017 threaten to "destroy" the value of the Government's flagship Universal Credit scheme as a tool for reducing poverty.

CPAG chief executive Alison Garnham said: "Just-managing families have already taken a big hit from previously announced cuts and there are more in the pipeline."

Now Mr Hammond is easing the pain by reducing the rate at which benefits are withdrawn from 65 per cent to 63 per cent, meaning that workers will lose 63p, rather than 65p, of their welfare for every pound they earn above their work allowance.

Labour's shadow chancellor John McDonnell said Mr Hammond had failed to provide support for people on low and middle incomes.

Watch | Universal Credit: What you need to know

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"It will be too little, too late for those working families who have had to bear the brunt of six wasted years of failed Tory economic policies," he said.

Former work and pensions secretaries Iain Duncan Smith and Stephen Crabb have each spoken out against the reductions to Universal Credit, due to be introduced as the new system to replace tax credits for families next year.